May be true, but that doesn't give the right for banks to just steal money from people.

People put their money in Cypriotic banks because it's a tax haven and they get insanely high rates on their savings. It's a known high risk-high reward place for your savings account. Given that, the majority of the people losing some money here (foreign investors) can't really come crying when the notably higher risk they knowingly took went sour. Playing with fire.

Essentially the idea behind this tax is quite a bit more fair than the other options. You cover the costs of the financial instability in Cyprus through the benefactors of said instability, which seems pretty fair. The other option is to let people who had nothing to do with it foot the bill indirectly.

That said, fair as the measure might be in theory, it's the dumbest thing I ever heard. If they want to save face for the Euro they should have backed Cyprus completely and cleaned the financial system from the inside out. If they wanted to dole out some tough love they simply should have watched Cyprus go bankrupt before doing anything. What they decided to do though, is both at the same time. They are destroying Cyprus financial industry while taking all the blame for that on themselves, while still poring money into it. It's the dumbest thing.